Smt. Kiran Narula, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 210/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5835 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R C KHANNA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR. BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.210(ASR)/2010. (ASSESSMENT YEAR: 2004-05) SMT. KIRAN NARULA, THE INCOME TAX OFFICER, C/O M/S.NARULA TRANSPORT CO., WARD 3(2),AMRITSAR. AMRITSAR. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI R.C. KHANNA, C.A. RESPONDENT BY: SHRI TARSEM LAL, D.R. ORDER PER H.L. KARWA, VICE PRESIDENT. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), AMRITSAR DATED 30-3-2010, RELATING TO THE A SSESSMENT YEAR 2004-05. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE RELATES TO THE ADDITION OF RS.1,50,000/- BEING THE SALE CONSIDERATION OF JEWEL RY. THE ASSESSEE IS AN INDIVIDUAL AND THE ASSESSMENT YEAR INVOLVED IS 2004 -05. IN THE RETURN OF INCOME, THE ASSESSEE HAS DECLARED A LONG TERM CAPIT AL GAIN OF R.1,840/- ON THE SALE OF JEWELLERY SHOWN AT RS.1,50,000/-. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. REQUIRED THE ASSES SEE TO EXPLAIN THE SOURCE OF ACQUISITION OF JEWELLERY AND TO PRODUCE THE SALE VOUCHERS AND PARTICULARS OF THE MODE OF PAYMENT RECEIVED FROM THE SALE OF JE WELLERY. IN RESPONSE TO THIS QUERY, THE ASSESSEE SUBMITTED THAT THE JEWELL ERY SOLD WAS A PART OF ISTRIDHAN GIVEN TO THE ASSESSEE BY HER PARENTS AT THE TIME OF HER MARRIAGE 2 AND OTHER SOCIAL FUNCTIONS. AS REGARDS THE SALE VO UCHERS AND THE MODE OF PAYMENT, IT WAS STATED THAT THE SALE WAS MADE IN CA SH AND NO VOUCHER WAS ISSUED BY THE PURCHASER NOR THE ASSESSEE INSISTED F OR THE SAME. THEREFORE, THE A.O. REQUIRED THE ASSESSEE TO INTIMATE THE NAME AND ADDRESS OF THE DEALER TO WHOM THE JEWELLERY WAS SOLD. VIDE LETTER DATED 15-2-2006, THE ASSESSEE SUBMITTED THAT THE JEWELLERY WAS SOLD IN CASH TO SH RI RAMAN SETH JEWELLERS, SHOP NO.110, JAGAN NATH CHAUHAN MARKET, KATRA MOHAR SINGH, AMRITSAR AND NO VOUCHER WAS ISSUED BY THE BUYER. TO VERIFY THE TRANSACTION, THE LETTER WAS ISSUED TO THE ABOVE JEWELERS. THE INSPECTOR OF THE DEPARTMENT WAS DEPUTED FOR THIS PURPOSE AND SHE REPORTED THAT SH. RAMAN SETH JEWELLERS HAD LEFT THE BUSINESS AND HAD CLOSED DOWN HIS SHOP 2-3 YEARS BACK. THE ASSESSEE WAS CONFRONTED WITH THE ABOVE FACT AND WAS ASKED TO PROVE THE GENUINENESS OF THIS TRANSACTION SINCE THERE WAS NO DOCUMENTARY EVIDENCE ON RECORD IN SUPPORT OF THE ABOVE TRANSACTION. HOWEVER, THE ASSE SSEE DID NOT FURNISH ANY FURTHER MATERIAL TO PROVE THE ABOVE TRANSACTION OF JEWELLERY. KEEPING IN VIEW THE ABOVE FACTS, THE A.O. OPINED THAT THERE WA S NO ACTUAL SALE OF JEWELLERY AND THE TRANSACTION HAS ONLY BEEN SHOWN T O INTRODUCE THE UNDISCLOSED INCOME BY THE ASSESSEE. THE A.O., THER EFORE, ADDED A SUM OF RS.50,000/- TREATING THE SAME AS INCOME FROM UNDISC LOSED SOURCES. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) CONFIRMED T HE ADDITION FOR THE REASONS STATED IN PARA 6 OF THE IMPUGNED ORDER, 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS CLAIMED THAT T HE MARRIAGE OF THE ASSESSEE TOOK PLACE ON 24-11-1984. THE ASSESSEE CLAIMED THA T THE JEWELLERY IN QUESTION WAS ACQUIRED BY HER OUT OF ISTRIDHAN IN ACCORDANCE WITH THE CUSTOMS AND USAGES OF THE ASSESSEE SOCIETY. IT IS ALSO CLAIMED THAT THE 3 JEWELLERS DID NOT GIVE THE SALE VOUCHER BECAUSE HE TOLD THE ASSESSEE THAT SALES TAX WOULD BE CHARGEABLE. HOWEVER, THE ASSESSEE HAS FURNISHED THE FULL NAME AND ADDRESS OF THE JEWELERS. THE LOWER AUTHORITIES DID NOT APPRECIATE THE ABOVE EXPLANATION OF THE ASSESSEE ON THE GROUND THA T THE A.O. DEPUTED HIS INSPECTOR TO CONDUCT ON THE SPOT ENQUIRIES, WHICH A RE REPRODUCED IN HIS OWN WORDS: THE INSPECTOR OF THIS OFFICE WAS DEPUTED FO R THIS PURPOSE AND SHE REPORTED THAT SHRI RAMAN SETH JEWELLERS HAD LEFT TH E BUSINESS AND HA CLOSED DOWN HIS SHOP 2-3 YEARS BACK. SHRI R.C. KHANNA, C.A., THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. NE VER CONFRONTED THE REPORT OF THE INSPECTOR TO THE ASSESSEE. SECONDLY, THIS R EPORT HAS NOT BEEN REPRODUCED EVEN IN THE ASSESSMENT ORDER. IT SEEMS T HAT THE A.O. HAS MADE THE ADDITION ON THE BASIS OF REPORT OF THE INSPECTO R, WHICH WAS NEVER CONFRONTED TO THE ASSESSEE. IT IS WELL SETTLED LAW THAT THE EVIDENCE COLLECTED BY THE A.O. AT THE BACK OF THE ASSESSEE CANNOT BE U SED IN EVIDENCE AGAINST THE ASSESSEE WITHOUT AFFORDING AN OPPORTUNITY OF CR OSS EXAMINATION OF THE WITNESS. IN THE INSTANT CASE, THE A.O. HAS NOT A FFORDED ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE INSPECTOR OF THE DEPARTMENT. FURTHERMORE, IF IT IS ADMITTED, FOR ARGUMENT SAKE T HAT THE INSPECTOR HAS VISITED THE SHOP AND STATED THAT THE SHOP WAS CLOSE D DOWN 2-3 YEARS BACK, THE ASSESSMENT ORDER PASSED IN THIS CASE IS DATED 24-3- 006 AND THE SALE OF JEWELLERY WAS MADE BY THE ASSESSEE ON 31-3-2004. SO IT HAS NOT BEEN PROVED THAT THE SHOP WAS CLOSED WHEN THE JEWELLERY WAS S OLD. IT IS ALSO SEEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAS SUBMITTED AN AFFIDAVIT STATING THEREIN THAT DURING THE PREVIOUS YEAR ENDING 31-3-2004, SHE HAD SOLD JEWELLERY ABOUT 280 GRAMS OUT OF TOTAL JEW ELLERY AS ISTRIDHAN IN CASH ON 31-3-2004 TO SHRI RAMAN SETH JEWELLERS AT SHOP NO.110, JAGAN NATH CHAUHAN MARKET, KATRA MOHAR SINGH, AMRITSAR. I T IS ALSO MENTIONED IN 4 THE AFFIDAVIT THAT SHE HAD DEPOSITED THE ENTIRE SAL E PROCEEDS IN THE SAVINGS BANK ACCOUNT NO.1517 WITH ORIENTAL BANK OF COMMERCE , BATALA ROAD, AMRITSAR ON 31-3-2004. THERE IS NO MATERIAL ON REC ORD TO CONTROVERT THE ABOVE CONTENTION OF THE ASSESSEE. THE ASSESSEE HAS ALSO CATEGORICALLY STATED IN THE AFFIDAVIT THAT SHE WAS MARRIED TO SHRI SURIN DER SINGH ON 24-11-1984 AND ABOUT 1000 GRAMS JEWELLERY AS ISTRIDHAN WAS RECEIVED BY HER FROM HER PARENTS AND IN-LAWS. CONSIDERING THE ENTIRE FACTS AND THE CIRCUMSTANCES OF THE CASE, THERE WAS NO JUSTIFICATION IN MAKING THE IMPUGNED ADDITION. IN OUR VIEW, THE SALE OF JEWELLERY STANDS EXPLAINED BY THE ASSESSEE IN SO MANY WORDS AND, THEREFORE, WE DELETE THE ADDITION MADE B Y THE A.O. AND CONFIRMED BY THE CIT(A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8T H JUNE, 2011. SD/- SD/- (MEHAR SINGH) (H.L. KARWA) ACCOUNTANT MEMBER. VICE PRESIDENT. DATED: 8 TH JUNE, 2011. KC/- COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE (2) THE ITO (3) THE CIT (4) THE CIT(A) (5) THE SR.D.R., ITAT, ASR. TRUE COPY BY ORDER ASSTT. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AMRITSAR.